DTI frees tenants from beer contracts
Thursday 20 February 1997
The deal, which was welcomed by Inntrepreneur's chief executive, Mike Foster, should allow numerous legal rows between Inntrepreneur and its tenants to be resolved, clearing a stumbling block to a stock market listing. Analysts said they expected Inntrepreneur, which owns 2,900 pubs, to come to the market with a price tag of about pounds 800m.
Inntrepreneur was formed in 1989 when Foster's, which then owned Courage, acquired the brewing interests of Grand Metropolitan and a joint venture company was created to hold the two companies' pub estates. Following a Monopolies and Mergers Commission investigation of the deal in 1990, undertakings were made to reduce the vertical links between the Courage brewing company and the estate and to reduce the geographical concentration of pubs tied to Courage.
Yesterday's decision by the DTI means Inntrepreneur is no longer required to limit its estate to 4,350 pubs, is no longer limited to 20 per cent of the pubs in any petty sessional district and is no longer required to free any pubs it still owns from tie by next year.
In exchange it must allow its tenants to buy beer from brewers other than Scottish & Newcastle, the current owner of Courage, in a move which is expected to reduce tenants' costs considerably. Discounts for barrels of beer have widened in recent years thanks to the increasing buying power of independent chains such as Greenalls and JD Wetherspoon, but Inntrepreneur tenants have largely missed out on the downward trend in prices because of their onerous tie to Scottish & Newcastle.
Mr Foster said: "Inntrepreneur has now been given the opportunity to operate on the same playing field as other independent pub companies."
Announcing the change, John Taylor, Minister for Corporate and Consumer Affairs, said: "I have agreed that Inntrepreneur should be released from the existing undertakings. Inntrepreneur's estate is considerably smaller than at the time the undertakings were introduced. In addition to this, the operation of pub chains has become clearer since the time of the merger. Pub chains can stimulate competition, providing a counter-balancing force to the selling power of the large brewers."
Referring to the ongoing legal rows between Inntrepreneur and its tenants, he said: "I recognise that there has been some friction between Inntrepreneur and its tenants. I welcome the recent issue of a Code of Practice covering Inntrepreneur's relationship with its tenants, which has demonstrated the company's desire to resolve these differences. I am sure that Inntrepreneur will respond to this decision in a similar spirit, seeking to foster relationships with its tenants."
The decision to allow Inntrepreneur to extend its tie beyond 1998 is certain to anger some tenants who have alleged inflated beer prices as a result of the current tie agreement.
- 1 Andreas Lubitz: Who is Germanwings co-pilot who 'locked out captain and crashed flight 9525'?
- 2 JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
- 3 Germanwings crash: Descent may have been 'deliberate, suicidal choice' by pilot, claims experts
- 4 Germanwings plane crash live: Andreas Guenter Lubitz intentionally crashed flight 9525 into the Alps in act of mass murder and suicide – latest
- 5 Video shows what happens when lava is poured onto ice
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Vote Ukip, says far-right group Britain First
iJobs Money & Business
£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...
£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...
£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...
£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...